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Saturday, 15 January 2022

Cathay blow to struggling travel agents

 

Ever thought about how travel agents make a profit?

Remember they do not charge customers for whom they book a flight or a package holiday.

It is all about commission, which is paid to an agent by an airline, hotel, cruise line, tour organiser or travel group for each booking.

This is why travel agents will often try to direct you in a specific direction when it comes to your business or holiday choices. The possibility for conflicts is huge.

Don't expect you agent to be wanting to book you onto a Cathay Pacific flight any time soon - particularly if there is a viable alternative.

Cathay commission payments to agents in Australia and New Zealand will move from 5% to just 1% - the same payout as rivals Qantas and Emirates - effective from July.

This means that if your agent books you a single return flight on Cathay for $1800, it will make just $18 in commission.

Cathay Pacific says it is committed to working closely with its “key travel partners to ensure a successful transition to a new way of working” - which is corporate-speak for "get stuffed".

Qantas and Emirates have more routes and higher visibility - and bring agents more business than Cathay, which might be digging itself a deep hole.

Cathay has described the move as “a fresh approach to trade partner engagement” as the Hong Kong carrier makes “tough but necessary decisions to see ourselves through the pandemic”.

“Our commitment to Australia and NZ remains steadfast, and we will continue to invest in this region as we work through the pandemic,” the airline said in a statement.

Flights from Australia to Hong Kong are currently banned as authorities battle to contain Covid-19.


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